SOURCE: Advent Software

April 26, 2011 16:17 ET

Advent Software Reports First Quarter 2011 Results

Revenue of $75 Million and GAAP Operating Profitability of $12 Million

SAN FRANCISCO, CA--(Marketwire - Apr 26, 2011) - Advent Software, Inc. (NASDAQ: ADVS), a leading provider of software and services to the global investment management industry, announced today its financial results for the first quarter ended March 31, 2011.

"I am pleased to report strong first quarter results, reflecting solid global execution and continued demand for our market-leading solutions," said Stephanie DiMarco, Founder and Chief Executive Officer of Advent. "By staying focused on our strategy -- broadening our product portfolio, expanding our global footprint, and growing our addressable market -- 2011 is off to a great start, and we see strong demand ahead that will continue to drive top-line growth."

FIRST QUARTER 2011 RESULTS

GAAP Results for Continuing Operations

The Company reported quarterly revenue from continuing operations of $75.3 million for the first quarter of 2011, compared to $66.7 million in the first quarter of 2010, a 13% increase.

Operating income from continuing operations for the first quarter of 2011 was $11.5 million, or 15% of revenue, up from $7.3 million or 11% of revenue for the first quarter of 2010.

Net income from continuing operations for the first quarter of 2011 was $7.9 million compared to $4.2 million in the first quarter of 2010, an 86% increase.

On a fully diluted basis, earnings per share from continuing operations in the first quarter of 2011 were $0.14 and represent an 83% increase from diluted earnings per share of $0.08 in the first quarter of 2010.

Operating cash flow from continuing operations in the first quarter of 2011 was $11.6 million, compared with $12.5 million in the first quarter of 2010, an 8% decrease. Cash, cash equivalents and marketable securities of continuing operations totaled $140.9 million as of March 31, 2011, compared to $152.0 million as of December 31, 2010, a 7% decrease.

Total deferred revenue from continuing operations as of March 31, 2011 was $156.5 million, compared to $154.2 million as of December 31, 2010, a 1% increase from the end of last quarter.

Non-GAAP Results for Continuing Operations

Non-GAAP operating income from continuing operations for the first quarter of 2011 was $17.7 million, or 23% of revenue. This represents a 39% increase compared to $12.7 million from continuing operations, or 19% of revenue, in the first quarter of 2010. On a fully diluted basis, non-GAAP earnings per share from continuing operations were $0.21 in the first quarter of 2011 and represent a 45% increase from non-GAAP diluted earnings per share of $0.14 in the first quarter of 2010.

The reconciliation between GAAP and non-GAAP financial measures is provided at the end of this press release.

FIRST QUARTER HIGHLIGHTS

--  First Quarter Bookings:  The term license and Advent OnDemand®
    contracts signed in the first quarter of 2011 will contribute
    $5.1 million in annual revenue once they are fully implemented.
--  Continued International Demand:  Signaling continued momentum outside
    of North America, Advent signed new contracts around the world,
    including Hong Kong, Saudi Arabia, France, Scandinavia, Switzerland and
    the United Kingdom (UK) in the first quarter. New clients included
    United Investment Bank in Dubai and Carmignac Gestion in Paris. Revenue
    from international operations accounted for 17% of total revenue in the
    first quarter of 2011.
--  Acquisition of Syncova:  Advent completed its acquisition of Syncova
    Solutions Limited, a privately held UK-based company specializing in
    margin and financing management for hedge funds and prime brokers.
    Under the terms of the agreement, Advent acquired all of the
    outstanding capital stock of Syncova for $25 million. The completion of
    the acquisition expands its leadership in the alternative asset
    management segment with the addition of margin management and financing
    analysis capabilities to Advent's market leading Geneva platform.
--  Recognition of Superior Service Delivery:  Advent earned "Best of the
    Best" Recognition from the Professional Services Maturity Benchmark
    report conducted by independent research and consulting firm Service
    Performance Insight (SPI) Research, whose focus is operational
    efficiency and effectiveness. Advent significantly outperformed the
    benchmark average by excelling in all five service performance
    categories: Leadership, Finance and Operations, Human Capital
    Alignment, Service Execution and Client Relationships.
--  Received Final Payment for MicroEdge Divestiture: In connection with
    the sale of Advent's MicroEdge subsidiary in the fourth quarter of
    2009, Advent received the final payment of $3 million, which was
    released from escrow. This receipt was recorded in Advent's
    discontinued operations' results in the first quarter of 2011.

FINANCIAL GUIDANCE

Advent updates the following financial guidance for the second quarter and fiscal year 2011:

   Guidance                                     Q2 2011         FY 2011
--------------                              --------------  -------------
Total Revenue ($M)                             $ 75-$ 77      $ 310-$ 317
GAAP Operating Margin                              n/a           13%-14%
Amortization of Intangibles (% of revenue)         n/a            1%-2%
Stock Compensation Expense (% of revenue)          n/a            6%-7%
Non-GAAP Operating Margin                          n/a           21%-22%
Operating Cash Flow ($M)                           n/a         $ 81-$ 85
Capital Expenditures ($M)                          n/a         $ 12-$ 15

INVESTOR CALL

Advent Software, Inc. will host its Q1 2011 quarterly earnings conference call at 5:00 p.m. Eastern time today. The Q1 2011 earnings presentation and trended disclosures file, which include highlights and detailed financial information, are currently available at http://investor.advent.com. To participate via phone, please dial 888-268-4176 and request conference ID #61339775. A replay will be available through midnight, May 3, 2011, by calling 888-286-8010 and referencing conference ID #82499618. The conference call will also be webcast live and then archived on http://investor.advent.com.

ABOUT ADVENT

Advent Software, Inc. (www.advent.com), a global firm, has provided trusted solutions to the world's leading financial professionals since 1983. Firms in more than 60 countries use Advent technology. Advent's quality software, data, services and tools enable financial professionals to improve service and communication to their clients, allowing them to grow their business while controlling costs. Advent is the only financial services software company to be awarded the Service Capability and Performance certification for being a world-class support organization. For more information on Advent products visit http://www.advent.com/about/resources/demos/pr.

ABOUT NON-GAAP FINANCIAL INFORMATION

This press release includes non-GAAP financial measures. For a description of these non-GAAP financial measures, including the reasons management uses each measure, and reconciliations of these non-GAAP financial measures to the most directly comparable financial measures prepared in accordance with Generally Accepted Accounting Principles (GAAP), please see the accompanying tables entitled "Reconciliation of Selected GAAP Measures to Non-GAAP Measures."

FORWARD-LOOKING STATEMENTS

The financial projections under Financial Guidance, and statements regarding our revenue growth, market acceptance and demand for our products that will drive top line growth, international expansion, synergies related to our acquisition of Syncova Solutions Limited, and the momentum of the business, and other forward-looking statements included in this presentation reflect management's best judgment based on factors currently known and involve risks and uncertainties; our actual results may differ materially from those discussed here. These risks and uncertainties include: potential fluctuations in new contract bookings, renewal rates, operating results and future growth rates; continued market acceptance of our Advent Portfolio Exchange®, Geneva® and Moxy® products; the successful development, release and market acceptance of new products and product enhancements; uncertainties and fluctuations in the financial markets; the Company's ability to satisfy contractual performance requirements; difficulties in integrating merged businesses, such as Syncova Solutions Limited, and achieving expected synergies and results; and other risks detailed from time to time in our SEC reports including, but not limited to, our quarterly reports on Form 10-Q and our 2010 annual report on Form 10-K. The Company disclaims any intention or obligation to publicly update or revise any forward-looking statements including any guidance, whether as a result of events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

Advent, the Advent logo, Advent Software, Advent Portfolio Exchange, Advent OnDemand, Geneva and Moxy are registered trademarks of Advent Software, Inc. All other company names or marks mentioned herein are those of their respective owners.

                          ADVENT SOFTWARE, INC.
                  CONDENSED CONSOLIDATED BALANCE SHEETS
                              (In thousands)
                            (GAAP, Unaudited)

                                                  March 31    December 31
                                                    2011          2010
                                                ------------  ------------
ASSETS
Current assets:
   Cash and cash equivalents                    $     74,301  $     81,948
   Short-term marketable securities                   58,936        70,075
   Accounts receivable, net                           50,199        49,960
   Deferred taxes, current                            16,441        16,358
   Prepaid expenses and other                         20,572        17,864
                                                ------------  ------------ 
      Total current assets                           220,449       236,205
Property and equipment, net                           40,446        41,524
Goodwill                                             163,860       145,580
Other intangibles, net                                31,610        19,772
Long-term marketable securities                        7,633             -
Deferred taxes, long-term                             34,641        33,591
Other assets                                          11,124        12,059
Noncurrent assets of discontinued operation            2,029         2,095
                                                ------------  ------------

      Total assets                              $    511,792  $    490,826
                                                ============  ============

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
   Accounts payable                             $      6,095  $      6,737
   Accrued liabilities                                29,287        34,080
   Deferred revenues                                 150,096       147,896
   Income taxes payable                                3,829         1,691
   Current liabilities of discontinued
    operation                                          1,644           165
                                                ------------  ------------
      Total current liabilities                      190,951       190,569
Deferred revenues, long-term                           6,426         6,337
Other long-term liabilities                           16,859        14,844
Noncurrent liabilities of discontinued
 operation                                             4,937         5,228
                                                ------------  ------------

      Total liabilities                              219,173       216,978
                                                ------------  ------------


Stockholders' equity:
   Common stock                                          524           520
   Additional paid-in capital                        418,074       411,600
   Accumulated deficit                              (137,159)     (146,887)
   Accumulated other comprehensive income             11,180         8,615
                                                ------------  ------------
      Total stockholders' equity                     292,619       273,848
                                                ------------  ------------

      Total liabilities and stockholders'
       equity                                   $    511,792  $    490,826
                                                ============  ============




                          ADVENT SOFTWARE, INC.
              CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                  (In thousands, except per share data)
                            (GAAP, Unaudited)

                                                Three Months Ended March 31
                                                ---------------------------
                                                    2011          2010
                                                ------------- ------------
Net revenues:
Recurring revenues                              $      67,327 $     60,119
Non-recurring revenues                                  7,999        6,569
                                                ------------- ------------

    Total net revenues                                 75,326       66,688

Cost of revenues (1):
Recurring revenues                                     14,788       12,427
Non-recurring revenues                                  7,239        6,657
Amortization of developed technology                    1,516        1,516
                                                ------------- ------------

    Total cost of revenues                             23,543       20,600
                                                ------------- ------------

    Gross margin                                       51,783       46,088

Operating expenses (1):
Sales and marketing                                    18,184       16,860
Product development                                    12,642       12,061
General and administrative                              9,084        9,551
Amortization of other intangibles                         320          315
Restructuring charges                                      26           29
                                                ------------- ------------

    Total operating expenses                           40,256       38,816
                                                ------------- ------------

Income from continuing operations                      11,527        7,272
Interest income and other income (expense), net            31         (706)
                                                ------------- ------------

Income from continuing operations before income
 taxes                                                 11,558        6,566
Provision for income taxes                              3,654        2,323
                                                ------------- ------------

    Net income from continuing operations       $       7,904 $      4,243
Discontinued operation:
    Net income (loss) from discontinued
     operation (net of applicable taxes of
     $1,344 and $(33), respectively)                    1,824          (48)
Net income                                      $       9,728 $      4,195
                                                ============= ============
Basic net income (loss) per share:
    Continuing operations                       $        0.15 $       0.08
    Discontinued operation                               0.03        (0.00)
                                                ------------- ------------
       Total operations                         $        0.19 $       0.08
                                                ============= ============
Diluted net income (loss) per share:
    Continuing operations                       $        0.14 $       0.08
    Discontinued operation                               0.03        (0.00)
                                                ------------- ------------
       Total operations                         $        0.18 $       0.08
                                                ============= ============
Weighted average shares used to compute net
 income per share:
    Basic                                              52,201       51,748
    Diluted                                            55,339       54,277

(1) Includes stock-based employee compensation
     expense as follows:
      Cost of recurring revenues                $         500 $        414
      Cost of non-recurring revenues                      246          290
                                                ------------- ------------
        Total cost of revenues                            746          704

      Sales and marketing                               1,498        1,298
      Product development                               1,172        1,209
      General and administrative                        1,043        1,074
                                                ------------- ------------
        Total operating expenses                        3,713        3,581
                                                ------------- ------------

      Total stock-based employee compensation
       expense                                  $       4,459 $      4,285
                                                ============= ============



                          ADVENT SOFTWARE, INC.
              CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                              (In thousands)
                                (Unaudited)

                                                   Three Months Ended
                                                        March 31
                                                --------------------------
                                                    2011          2010
                                                ------------  ------------
Cash flows from operating activities:
  Net income                                    $      9,728  $      4,195
  Adjustment to net income for discontinued
   operation                                          (1,824)           48
                                                ------------  ------------
  Net income from continuing operations                7,904         4,243
  Adjustments to reconcile net income to net
   cash provided by operating activities from
   continuing operations:
    Stock-based compensation                           4,459         4,285
    Depreciation and amortization                      4,417         4,331
    Provision for doubtful accounts                       71            25
    Reduction of sales returns                          (706)         (168)
    Deferred income taxes                                (72)           (9)
    Other                                                 38           111
                                                ------------  ------------
        Effect of statement of operations
         adjustments                                   8,207         8,575
    Changes in operating assets and
     liabilities:
      Accounts receivable                                509         2,031
      Prepaid and other assets                        (1,453)        1,692
      Accounts payable                                  (670)        4,435
      Accrued liabilities                             (5,773)       (6,404)
      Deferred revenues                                  961        (3,974)
      Income taxes payable                             1,908         1,938
                                                ------------  ------------
        Effect of changes in operating assets
         and liabilities                              (4,518)         (282)
                                                ------------  ------------

Net cash provided by operating activities from
 continuing operations                                11,593        12,536

Cash flows from investing activities:
  Cash used in acquisitions, net of cash
   acquired                                          (24,648)       (4,719)
  Purchases of property and equipment                 (1,436)       (4,308)
  Capitalized software development costs              (1,612)       (1,197)
  Purchases of marketable securities                 (26,140)       (3,000)
  Sales and maturities of marketable securities       29,408         3,000
                                                ------------  ------------

Net cash used in investing activities from
 continuing operations                               (24,428)      (10,224)

Cash flows from financing activities:
  Proceeds from common stock issued from
   exercises of stock options                          3,161         3,113
  Withholding taxes related to equity award net
   share settlement                                   (2,608)         (534)
  Excess tax benefits from stock-based
   compensation                                        1,344             -
  Repurchase of common stock                               -       (10,542)
                                                ------------  ------------

Net cash provided by (used in) financing
 activities from continuing operations                 1,897        (7,963)

Net cash transferred from (to) discontinued
 operation                                             3,078           (54)

Effect of exchange rate changes on cash and
 cash equivalents                                        213          (157)
                                                ------------  ------------

Net change in cash and cash equivalents from
 continuing operations                                (7,647)       (5,862)
Cash and cash equivalents of continuing
 operations at beginning of period                    81,948        57,877
                                                ------------  ------------

Cash and cash equivalents of continuing
 operations at end of period                    $     74,301  $     52,015
                                                ============  ============


                                                   Three Months Ended
                                                         March 31
                                                --------------------------
                                                    2011          2010
                                                ------------  ------------
Supplemental disclosure of cash flow
 information
Cash flow from discontinued operation:
  Net cash provided by (used in) operating
   activities                                   $         74  $       (319)
  Net cash provided by investing activities            3,004             -
  Net cash transferred from (to) continuing
   operations                                         (3,078)           54
  Effect of exchange rates on cash and cash
   equivalents                                             -            (1)
                                                ------------  ------------
  Net change in cash and cash equivalents from
   discontinued operations                                 -          (266)
  Cash and cash equivalents of discontinued
   operation at beginning of period                        -           266
                                                ------------  ------------
  Cash and cash equivalents of discontinued
   operation at end of period                   $          -  $          -
                                                ============  ============




                          ADVENT SOFTWARE, INC.
RECONCILIATION OF SELECTED CONTINUING OPERATIONS' GAAP MEASURES TO NON-GAAP
                                 MEASURES
                  (In thousands, except per share data)
                                (Unaudited)

To supplement our condensed consolidated financial statements presented on
a GAAP basis, Advent uses non-GAAP measures of continuing operations'
operating income, net income and net income per share, which are adjusted
to exclude certain costs, expenses, gains and losses we believe appropriate
to enhance an overall understanding of our past financial performance and
also our prospects for the future. These adjustments to our current period
GAAP results are made with the intent of providing both management and
investors a more complete understanding of Advent's underlying operational
results and trends and our marketplace performance. In addition, these
adjusted non-GAAP results are among the information management uses as a
basis for our planning and forecasting of future periods. The presentation
of this additional information is not meant to be considered in isolation
or as a substitute for results prepared in accordance with generally
accepted accounting principles in the United States of America.


                           Three Months Ended March 31, 2011 for Continuing
                                             Operations
                           ------------------------------------------------
                            Gross    Gross   Operating Operating    Net
                           Margin   Margin %   Income   Income %   Income
                           -------- --------  --------- --------  --------
GAAP                       $ 51,783       69% $  11,527       15% $  7,904

  Amortization of acquired
   developed technology         916                 916                916
  Amortization of other
   acquired intangibles           -                 320                320
  Stock-based compensation
   - cost of revenues           746                 746                746
  Stock-based compensation
   - operating expenses           -               3,713              3,713
  Acquisition related
   expenses                       -                 450                450
  Restructuring charges           -                  26                 26
  Income tax adjustment
   for non-GAAP (1)               -                   -             (2,551)

                           --------           ---------           --------
Non-GAAP                   $ 53,445       71% $  17,698       23% $ 11,524
                           ========           =========           ========

Diluted net income per
 share
  GAAP                                                            $   0.14
  Non-GAAP                                                        $   0.21

Shares used to compute
 diluted net income per
 share                                                              55,339

                               Three Months Ended March 31, 2010 for
                                       Continuing Operations
                          ------------------------------------------------
                            Gross    Gross   Operating Operating    Net
                           Margin   Margin %   Income   Income %   Income
                           -------- --------  --------- --------  --------

GAAP                       $ 46,088       69% $   7,272       11% $  4,243

  Amortization of acquired
   developed technology         804                 804                804
  Amortization of other
   acquired intangibles           -                 315                315
  Stock-based compensation
   - cost of revenues           704                 704                704
  Stock-based compensation
   - operating expenses           -               3,581              3,581
  Restructuring charges           -                  29                 29
  Income tax adjustment
   for non-GAAP (1)               -                   -             (1,877)

                           --------           ---------           --------
Non-GAAP                   $ 47,596       71% $  12,705       19% $  7,799
                           ========           =========           ========

Diluted net income per
 share
  GAAP                                                            $   0.08
  Non-GAAP                                                        $   0.14

Shares used to compute
 diluted net income per
 share                                                              54,277


(1) The estimated non-GAAP effective tax rate was 35% for the three months
    ended March 31, 2011 and 2010, respectively, and has been used to
    adjust the provision for income taxes for non-GAAP purposes.



                          Advent Software, Inc.
Reconciliation of Projected Continuing Operations' GAAP Operating Income %
                      to Non-GAAP Operating Income %
                        (Preliminary and unaudited)

Advent provides projections of non-GAAP measures of its continuing
operations' operating income, which exclude certain costs, expenses, gains
and losses which it believes is appropriate to enhance an overall
understanding of our past financial performance and also our prospects for
the future. These adjustments to our projected continuing operations' GAAP
results are made with the intent of providing management and investors a
more complete understanding continuing operations' underlying operational
results and trends and our marketplace performance. In addition, these
adjusted non-GAAP projections are among the information management uses as
a basis for planning and forecasting of future periods. The presentation of
this additional information is not meant to be considered in isolation or
as a substitute for results prepared in accordance with generally accepted
accounting principles in the United States of America.

                                     Twelve Months Ended December 31, 2011
                                             Continuing Operations
                                               Operating Income %
                                     -------------------------------------
        Projected GAAP                        13%     to      14%
                                     =====================================
          Projected amortization of
           acquired developed technology
           and other acquired intangible
           asset adjustment                    1%     to       2%
          Projected stock based
           compensation adjustment             6%     to       7%
                                     -------------------------------------
        Projected non-GAAP                    21%     to      22%
                                     =====================================

Contact Information

  • CONTACT
    Media Contact:
    Smita Topolski
    Advent Software, Inc.
    (415) 645-1668
    Email Contact

    Investor Relations Contact:
    Heidi Flaherty
    Advent Software, Inc.
    (415) 645-1145
    Email Contact